Estee Lauder in talks to merge with Jean Paul Gaultier-owner Puig

March 23 (Reuters) – Estee Lauder is in talks regarding a potential business combination with Spanish beauty group Puig, the companies said on Monday, in a deal that would bring some of the world’s biggest beauty and fragrance brands such as Tom Ford, Charlotte Tilbury, Rabanne and Clinique under one roof.

The deal would create a $40 billion luxury beauty powerhouse, and give the companies a leg up in the global fragrance industry, which is facing a slowdown in demand after several years of strong post-pandemic growth.

Shares of Estee Lauder, which has a market capitalization of around $31 billion, fell sharply on the news, ending the session more than 7% lower on Monday.

The discussions between Estee and Barcelona-based Puig come amid an uptick in deal-making in the beauty sector. In October, Gucci-owner Kering agreed to sell its beauty business to L’Oreal for $4.7 billion, while Elf Beauty acquired Hailey Bieber’s makeup and skincare brand Rhode last year.

The deal with Kering gave L’Oreal Kering’s fragrance line Creed, as well as long-term exclusive rights to develop fragrance and beauty products under Kering’s fashion labels including Bottega Veneta and Balenciaga.

Part of the rationale behind merging Estee Lauder and Puig is that a combined company will better compete with L’Oreal, especially in the fragrance market, a source familiar with the deal said on Monday.

The deal could help drive Estee Lauder’s turnaround efforts as it battles sluggish consumer spending in the United States.

Puig, the company behind iconic perfume brands Rabanne, Carolina Herrera, Jean Paul Gaultier and Byredo, said that no agreement has been reached on the potential merger and that there is no assurance regarding the deal or its terms.

Estee Lauder and Puig have discussed a combination involving a mix of cash and stock, the Wall Street Journal reported on Monday, citing people familiar with the talks.

Estee had bought U.S. fashion label Tom Ford for $2.8 billion in 2022, its biggest deal so far.

Puig, which had completed Spain’s biggest initial public offering in nearly a decade in 2024, posted a 12% rise in 2025 net profit last month.

(Reporting by Neil J Kanatt and Deborah Sophia in Bengaluru and Abigail Summerville in New York. Editing by Alan Barona)